ORG INFORMATICS LIMITED - Bombay Stock Exchange...(Belgium), Unified Technologies Pvt. Ltd., ORG Telecom Ltd., ORG Singapore Pte. Ltd. a) The Belgium Satellite Services, S.A. (BSS)

ORG INFORMATICS LIMITED(An ISO 9001 : 2008 Company)

BOARD OF DIRECTORS

Mr. B.V. SuryakumarManaging Director

Mrs. Binu MehtaIndependent Director

Mr. R.L. DubeIndependent Director

Mr. Ketan K. AdhvaryuIndependent Director

AuditorsM/s Sorab S. Engineer & Co.,Chartered AccountantsISMILE Building, 381,Dr.D. Naoroji Road,Fort, Mumbai-400 001,

Regd. Office:3rd Floor, “Abhishek”,Akshar Chowk,Old Padra Road,Vadodara 390 020.

INDEX

Notice ............................................................................... 01

Director’s Report .............................................................. 01Auditor’s Report ............................................................... 11

Balance Sheet .................................................................. 15

Profit & Loss Account ....................................................... 16

Schedules

1. Share Capital ............................................................. 17

2. Reserves & Surplus ................................................... 17

3. Secured Loan ............................................................ 18

4. Unsecured Loan ........................................................ 18

5. Investment .................................................................. 18

6. Fixed Assets ............................................................... 19

7. Inventories ................................................................. 20

8. Sundry Debtors .......................................................... 20

9. Cash & Bank balances .............................................. 20

10. Loan & Advances ...................................................... 21

11. Current Liabilities & Provisions ................................. 21

12. Revenue from Operations ......................................... 22

13. Other Income ............................................................. 22

14. Stores and Spares Consumed................................. .22

15. Personnel Cost ......................................................... 23

16. Administrative and Other Expenses ......................... 23

17. Interest and Finance Charges .................................. 23

18. Cash Flow Statement ................................................ 24

19. Significant Accounting Polices and

Notes to Accounts ...................................................... 26

20. Statements u/s 212 of the Companies Act, 1956 ..... 38

21. Consolideted Financial Statements ......................... 41

ORG Informatics Limited (Consolidated) 2

GoGreenSupporting to MCA’s green initiative in Corporat governence, Members of the company are herebyrequested to register / update their email addresses by sending their details with e-mail address [email protected].

Directors’ Report

To the Members,

Your Directors submits the Annual Report of the Companyalong with the Audited Statement of Accounts for the financialyear ended on 31.3.2011.

1. Financial Results

The Financial Results of the Company on Consolidated basisare summarized hereunder :-

Particulars 2010-11 2009-10TRs. TRs.

Income 1,657,929 2,130,764Expenditure 1,545,787 1,935,962Gross Profit 112,142 194,802Interest and Fixed Financial Charges 41,718 166,294Depreciation & Amortization 115,019 120,908Tax 10,132 38,160Prior Period Adjustments - -Net Profit (54,727) (130,560)

2. Dividends

Based on the Company’s performance and consideringthe losses incurred by the Company in the previousfinancial years, your Directors do not recommendpayment of dividend for this financial year.

3. Transfer to Reserves

Considering the performance of the Company in the yearunder review, the Board of Directors do recommend theamount of TRs. 634 for transfer to Bond Redemptionreserve as required under section 117C of the CompaniesAct, 1956 read with General Circular No. 9/2000 dated18.2000, However the Board do not recommend anyamount to transfer to General Reserve.

4. Company’s Performance

There is marginal improvement in the Company’sperformance during the year under review on standalonebasis from the stage as reported in the Director’s Reportdated 18th August, 2011 and Director’s Report dated03rd September, 2011 for the financial year ended on31st March, 2009 and financial Year ended on 31st March,2010 respectively. The company has achievedconsolidated revenue of TRs.1,657,929 and incurredlosses of TRs. 54,727 against revenue of TRs. 2,130,764and incurred Losses of TRs. 130,560 during the previousyear.

The caused delay in finalization of Annual accounts forthe year under review is substantially due to the delay infinalization of financial statements of the company for thefinancial years 2008-09 and 2009-10 (due to the reasonsmentioned in the report for said period) which werecompleted on 3rd September, 2011 only.

The Board is now concentrating on completion of thedelayed large System Integration projects to maintainbusiness continuum, to develop customer confidence andto generate new System Integration and servicesbusiness. We are now able to achieve major project

ORG Informatics Limited1

ORG Informatics Limited

Regd. Office: 3rd Floor, “Abhishek”, Akshar Chowk, Old PadraRoad, Vadodara 390 020.

Notice

Notice is hereby given to shareholders to call adjourned Thirtyfifth Annual General Meeting of the Company on Tuesday the1st day of November, 2011 at 11.00 A.M. at Vanijya Bhavan,Race Course, Vadodara to transact the following business,which was not transacted in the Annual General Meeting heldon 30th September, 2011 due to non availability of Auditedfinancial statements:

Ordinary business:

Item 1

To receive, consider and adopt the Audited Profit and LossAccount for the year ended on March 31st, 2011 and theBalance Sheet of the Company as of that date together withReports of the Board of Directors and Auditors thereon.

By Order of the Board of Directors,Place: Vadodara Vinod NegiDate :05th October, 2011, Company Secretary

NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE ATTHE MEETING IS ENTITLED TO APPOINT A PROXYTO ATTEND AND VOTE INSTEAD OF HIMSELF ANDA PROXY NEED NOT BE A MEMBER.

2. Shareholders holding the shares in Electronic form arerequested to bring their Client ID and DPID at the meetingfor easy identification.

3. The Ministry of Corporate Affairs (MCA) vide Circular No.17/2011 and 18/2011 dated April 21 and April 29, 2011respectively has undertaken a “Green Initiative inCorporate Governance” and allowed Companies to sharedocuments with its Shareholders through electronic mode.Therefore, Members of the Company are requested tosupport this “Green Initiative in Corporate Governance”of MCA by Registering/Updating their e-mail addressesin respect of shares held in dematerialized form with theirrespective Depository Participants and in respect ofshares held in physical form with the M/s MAS ServicesLimited, New Delhi, the Registrar & Share Transfer Agent(RTA) of the Company. The details of RTA are annexedherein after.

Inspection of Documents

All the documents referred to in the accompanying Noticeshall be open for inspection at the Registered Office ofthe Company during the business hours on all workingdays (except Saturdays) till the date of meeting.

By order of the Board of Directors,

Place : Vadodara Vinod NegiDate :05th October, 2011, Company Secretary

milestones and expect to close the ongoing projects verysoon so that old pending receivable may be collected andcash flow situation may eased. New business acquisitionis a challenge given the cash flow situation which led toforegoing some new business in the recent past.

The Company is parallelly pursuing restructuring of Bankliabilities and amicable settlement with vendors.

5. Subsidiaries

The company has four Wholly Owned SubsidiaryCompanies namely, Belgium Satellite Services S.A.(Belgium), Unified Technologies Pvt. Ltd., ORG TelecomLtd., ORG Singapore Pte. Ltd.

a) The Belgium Satellite Services, S.A. (BSS) hasachieved the revenue of EURO 20.09 millionequivalent to INR 127.27 Cr. and incurred marginaloperational loss of EURO 0.02 million equivalent toINR 0.16 Cr. The company is performing well andwill achieve new benchmarks in the time to come.

b) Unified Technologies Pvt. Ltd. (TECHUNIFIED)the revenue generated by the company during theyear under review is Rs.21.91 Lakhs and incurredlosses of Rs.29.19 Lakhs. As reported earlier theManagement is focusing on reorganizing thecompany’s operations around its product portfolioand also diversifying into IT enabled services.

c) ORG Telecom Ltd. (OTL): OTL is now our followon subsidiary company as it become the subsidiaryof BSS with effect from the financial year underreview. The company has generated revenue ofRs.104.35 Lakhs and incurred losses of Rs.258.94Lakhs. However as reported earlier BSS is nowfocusing on satellite services business opportunityin India through OTL as Special purpose vehicle.

d) ORG Singapore Pte. Ltd. (ORG Singapore):There are no business operations during the financialyear under review in the company. However yourcompany is trying to explore the new businessopportunity for this subsidiary like offshore IT enabledservices etc.

6. Employees Stock Options Scheme (ESOS) :

Pursuant to permission granted by the shareholders ofthe Company to issue Shares under ESOS to itsemployees, your Board of Directors has formed an ESOSCommittee, with its current members consisting of Mr.B.V. Suryakumar, Mr. R.L. Dube and Mr. Ketan K.Adhvaryu, Directors of the Company.

Pursuant to the ESOS Scheme framed by the Companyin accordance with the approval obtained fromshareholders vide resolution dated August 30, 2003, theCompany has got in-principle approval for issuance of1176000 equity shares from the Stock Exchange, Mumbai.These shares could be issued by the ESOS Committeefrom time to time in accordance with the Scheme andSEBI Guidelines. The said ESOS Scheme was extendedto the employees of Subsidiary Company i.e. ORGTelecom Ltd. also vide Special Resolution passed by theshareholders of the Company in their Annual GeneralMeeting held on 30.8.2005.

Following disclosures are being made in respect of thepresent ESOS Schemes and Options allotted pursuantthereto as per the requirement of Clause 12.1 of the SEBI(ESOS & ESPS) Guidelines, 1999:-

ESOS –II* ESOS-III*( 2005 )** ( 2006 )**

(I) Optional Granted\ 2,93,000 4,46,000to be vested over to be vested over aa period of 4 years period of 4 yearsequally at the rate equally at the rateof 25% each year of 25% each year

(II) Pricing Formula Par value of the Par value of the shareshare which which is Rs. 10/-is Rs. 10/- oror Average of WeeklyAverage of Weekly High and Low of theHigh and Low of the closing price of theclosing price of share quoted on thethe share quoted National Stockon the National Exchange of IndiaStock Exchange of Limited or BombayIndia Limited or Stock ExchangeBombay Stock Limited where numberExchange Limited of trading quantity ofwhere number of shares are higher duringtrading quantity of the period of last twoshares are higher months or as may beduring the period thinks fit by the ESOSof last two months Committee.or as may bethinks fit by theESOS Committee.

(III) Total OptionsVested 2,38,475 2,79,250

(IV) Total OptionExercised 82,275 50,625

(V) Total No. of Shares 82,275 50,625as a result ofexercise of Options.

(VI) Total Option 20,250 45,000carried to next year

(VII) Total Options 1,90,475 3,50,375Lapsed

(VIII) Variation of terms N.A. except N.A. except inclusionof Options inclusion of of employees of

Subsidiary of Subsidiary of theemployees of Company (ORGthe Company Telecom Limited) and(ORG Telecom revision in PricingLimited) and Formula.revision inPricing Formula.

(IX) Money realized by Rs.41,13,750/- Rs.31,38,750/-exercise of Options

(X) Total number of 11,76,000 11,76,000Options approvedby Stock Exchangesunder the Scheme.

(XI) Employee wiseDetails of Options :

(a) Granted to Senior 2,04,000 4,46,000Management

(b) No. of Employees 16 13Receiving 5% ormore of Optionsout of the totalOption granted inthat year.

*Now, the 4 years vesting of Options under this trancheshave been completed.** During the year under report, no option was exercisedby any of the employees out of their carried forwardOptions.

ORG Informatics Limited 2

7. DirectorsMr. Manoj Gupta, Managing Director of the company,who was appointed on 18th August, 2009 has resigned on19th August, 2010 and then Board has appointed Mr. BVSuryakumar as Managing Director initially for a period ofone (1) year with effect from August 19th, 2010 andreappointed now for another two (2) years, subject toapproval of shareholders and Statutory Authorities.

The brief of changes in the non executive Directors of theCompany during the period from 1.4.2010 to till date areas given below:

Sr. Name of Directors Designation Date of Date of RemarksNo. Appointment Resignation

/Change ofDesignation

1 Mr. Kalyan Director 06.11.2009 21.06.2010 ResignationMazumder

2 Brig. Jagjit Singh Director 18.08.2009 01.08.2010 ResignationAhuja

3 Mr. Kartikeya Director 22.01.2007 11.04.2011 ResignationV. Sarabhai

4 Mr. Sushil KumarChaturvedi* CEO & WTD 18.08.2009 12.05.2011 Resignation

5 Mr. B.V. Managing 19.08.2010 ContinuingSuryakumar Director

6 Mr. R.L. Dube Director 06.07.2007 Continuing

7 Ms. Binu Mehta Director 19.08.2010 Continuing

8 Mr. Anmol Krishan Additional 12.05.2011 30.9.2011 CeasedSekhri Director

9 Mr. Ompal Singh Additional 12.05.2011 30.9.2011 CeasedChadha Director

10 Mr. Ketan K. Director 03.08.2011 ContinuingAdhvaryu

Note : Mr. Sushil Kumar Chatruvedi continues as ChiefExecutive Officer of the Company.

Mrs. Binu Mehta and Mr. R.L. Dube retire by rotation andbeing eligible offer themselves for re-appointment hasbeen reappointed in the thirty fifth Annual General Meeting,2011 held on 30th September, 2011.

8. Auditor’s and Auditor’s ReportThe Sorab S. Engineer & Co., Chartered Accountants,who are the Statutory Auditors of the company, retires onthe conclusion of Annual General Meeting, 2011 and arereappointed as Statutory Auditors of the company till theconclusion of next Annual General Meeting.The attached Auditor’s Report to the members of thecompany for the period under review is self explanatoryexcept Clauses referred herein below with clarifications/comments of the board on the same for the considerationof the members.

Clauses of Auditor’s Report:Clause-4: With respect to the contingent liabilities not providedfor, the Board is of the view that all the items report are notrequired to make any provisions as the same are eithersubjudic, project milestone achieved or appeal preferred etc.as the case may be. Regarding cash crunch problem andredressal of the same kindly refer Point-4 of this Report above.

Clause-5 (i): The provision of Rs.161,700 made for fall invalue of Investment in Unified Technologies Pvt. Ltd. was

because this Software Development Company has sufferedseverely during the economic meltdown. Majority of employeeshad left the company. The Management is now focusing onreorganizing the company’s operations around its productportfolio and also diversifying into IT enabled services.

Clause-5(ii): Kindly refer Note No7, of the Notes to Accounts,schedule-22 of the balance Sheet for clarification on thereported item.

Clause-5(iii): The Board is of the view that considering thebusiness relationship with the such sundry debtors, the sameis recoverable, may be with some reasonable deductions,which can not be ascertained at this stage.

Clause-5(iv): The balance confirmation for Banks account inAfganistan, where company was handing project during theyear 2004-05 could not be obtained.

Clause-5 (v): The Company has taken all appropriate actionto recover/adjust the reported amount from vendors, businessassociate companies.

Clause-5(vi): The Board is of the view, that there is possibilityof set off of carry forward CENVAT in future but this may becarry forward to the extent permitted by the provision ofrelevant Act. Kindly refer Note 10(a) of the Notes to Accounts,Schedule-22 of the Balance Sheet.

Clause-5(vii): The High Court of MP has passed the Order,quashing the decision of MPSEDC to encash Tender Securitysubmitted by the company. However the Court has given anopportunity to MPSEDC to issue a show cause Notice to thecompany before refund of such tender security and suchshow cause notice has been served to the company whichhas been replied by the company within the time provided.The Management is hopeful to recover said amount ofTRs.25000 from MPSEDC.

Clause-5(viii): Kindly refer Note No. 9, of the Notes toAccounts, schedule-22 of the balance Sheet for clarificationon the reported item.

Clause-5(ix): During the year under review, with the approvalof shareholders, subject to approval of Statutory Authorities,the company has appointed Mr. BV Suryakumar as NewManaging Director after resignation of Mr. Manoj Gupta asManaging Director on 19th August, 2010. The required statutoryapproval will be taken on removal of procedural constraintsfaced by the company with the Ministry of Corporate Affairs(online filing with MCA21). For further clarification kindly referNote No20.

Clause-5(x): The Management of the company in consultationwith the Board and Audit committee are of the view that noprovisions be made for the items reported there .Whereverappropriate they have been disclosed in the Contingentliabilities. Kindly refer relevant Note in the Notes to accountsfor further clarification.

Clause-6(iv) Kindly refer Note-7, 9 and 10 of the Notes toaccounts, Schedule-22 of the Balance Sheet for clarificationon the reported Items.

Clauses of Annexure of Audito’s Report:Clause-1&2: Considering the nature of business of thecompany, its not possible to physically verify the Inventories,Stock spare etc. at clients site.

Clause 3(b): Interest free loan is given to its wholly owned


subsidiary companies only. The company is negotiating withsuppliers to waive off the Interest and commission claim madeby them.

Clause-4 & 7: “The Board of Directors has noted theobservation of the Auditors that the internal audit & controlwas not commensurate with the size and nature of theCompany’s business. The Board submitted that due to severecash crunch in the company it could not done during lastfinancial years and assures the members that immediate stepwill be taken to ensure that the internal audit & control will becommensurate with the business operation of the Company.

9. General

Particulars as required under Section 217(1)(e) of theCompanies Act, 1956 read with Rule 2 of the Companies(Disclosure of Particulars in Report of Board of Directors)Rules, 1988 is appended herewith and forms part of thisreport.

There were No employees who withdrawn theremuneration, during the financial year under review,exceeding the limits specified under Section 217(2A) ofthe Companies Act, 1956 read with Companies(Particulars of Employees) Rules, 1975, as amended fromtime to time.

10. Directors’ Responsibility Statement

Your Directors confirm that:-

(i) In preparation of the annual accounts, the applicableaccounting standards have been followed along withproper explanation relating to material departures;

(ii) The directors have selected such accountingpolicies and applied them consistently and madejudgments and estimates that are reasonable andprudent so as to give a true and fair view of the stateof affairs of the company at the end of the financialyear and of the profit or loss of the company for thatperiod;

(iii) The directors have taken proper and sufficient carefor the maintenance of adequate accounting recordsin accordance with the provisions of Companies Act,1956 for safeguarding the assets of the companyand for preventing and detecting frauds and otherirregularities;

(iv) The directors have prepared the annual accountson a going concern basis.

11. Corporate Governance

The Report on Corporate Governance as required underClause 49 of the Listing Agreement is given as anAnnexure-II to this Report. A Certificate from PracticingCompany Secretaries regarding compliance of applicableconditions of Corporate Governance as stipulated underClause 49 of the Listing Agreement is also attached tothis report.

12. Acknowledgements

The Board records its appreciation of the support whichthe Company has received from its bankers, customers,government organizations, overseas strategic alliancepartners, staff and employees. The Board also

appreciates the confidence reposed by the shareholdersin the Company and its management.

For and on behalf of the Board of Directors

B.V. Suryakumar Binu MehtaManaging Director Director

VadobaraOctober 5, 2011

Annexure to the Directors’ ReportParticulars pursuant to Section 217(1)(e) of theCompanies Act, 1956 read with Companies (Disclosureof Particulars in the Report of Board of Directors) Rules,1988

CONSERVATION OF ENERGY :

Although the Computer Services Industry as such is not anenergy intensive industry, effort are being made continuouslyby the Company for the conservation of energy throughimproved operational methods and other means.

Form of Disclosure of Particulars with respect to Absorptionof Technology, Research & Development (R&D).

FORM B

1. Research & Development : Not Applicable2. Foreign Exchange earnings/ : Rs. (TRs.)

Outgoings

Foreign Exchange Inflow : 28,357

Foreign Exchange Outflow : 21,655

Annexure-IManagement Discussion and Analysis Report:

Introduction

ORG is currently engaged in the business of Telecom/ITSystems Integration, Managed Services, SatelliteCommunications, Software Services including AMC/FMSServices in IT and Telecom sector. The Company has beenable to maintain its position as a major player in SystemIntegration business in Government Domain with dominantmarket share for turnkey projects and make forays in satellitedomain and content delivery. Major System IntegrationProjects have progressed to customers satisfaction resultingin Repeat business and extension of AMC and FMS contracts.

While the impact of Global recession has been profound ondomestic front, however ORG was insulated to some extentdue to lower dependence on export business. However thecompany had to face severe cash crunch resulting in cashflow issues putting a strain on acquisition of new business.But ORG due to it’s resilience and dedicated staff managed tosurvive the crisis and focused on completing the ongoingcontracts.

Business Vertical REVIEW

Telecom/IT Systems Integration & Services :

Industry structure and Developments:

Indian economy was not insulated from the ramifications ofGlobal meltdown, however Telecom vertical has been showingsustained growth and there is increased awareness that


Telecom/IT are growth engines to boost productivity andcompetitiveness in the Industry. Government has realizedrightfully and taken initiatives for using Technology to empowercitizens through E- Governance, which has resulted inincreased Telecom /IT spending by Corporate andGovernment sector alike. Governments E- Governanceprogram has laid increased emphasis on the turnkey solutionrequirements, which has resulted in increased deployment ofcomputing infrastructure and networks. A significant trendwas increase in Data centers, Connectivity, and the last milesolutions. These have been historically the skill sets of ORG.Thankfully these initiatives of Government and Corporatesector together have opened up tremendous opportunitiesfor System Integrators and Service providers.

Opportunities and Threats:

The initiatives taken by Government and Corporate sectorand renewed emphasis on expanding IT/Telecominfrastructure to rural areas provide ideal target market forthe company, which is historically established in the abovespace. The renewed emphasis and consolidation among itsclient base provides company an exciting opportunity to beable to expand its business and target higher profitability.

Outlook :

The Company had embarked on consolidating its position byfocusing on acquiring in house skill sets ,solutions and serviceprovision during the year which has resulted in acceptance ofcompany as a one stop solution provider which is evidentfrom the repeat business the company is able to attract andwin. The new opportunities have promised a larger marketshare for the company.

Risks and Concerns:

Telecom/IT sector in India has multiple players both domesticand international operating in the market. There are continuedcompetitive pressures on margins and sales. Additionally,cash flow remains a major constraint as ORG’s ability tosecure and execute large project profitably.

Telecom :

Industry Structure and Developments

Telecom sector in Indian Subcontinent, CIS, Africa and SouthEast Asia continue to be under tremendous growth stage.With the Government initiative and Corporate emphasis hasfuelled technological advances and newer service offeringsthere is a renewed growth in the systems requirement forservicing the growth. The main impetus is from the subscribergrowth being witnessed in these markets which is driving thegrowth for equipments and services.

Opportunity & Threats

Increasing public and private investment for satellite servicesin broadcasting services (TV, Mobile Earth, Fixed Earthsolution), Teleport Services ( Carrier SCPC etc.) andSATCOM (Telecom conversion). Belgium Satellite ServicesSA (BSS) being among the top satellite service providerworldwide will be able to exploit these opportunities.

Outlook

The Company has major projects under execution phase andis pitching for diversification in private sector with emphasison scaling services business. Telecom segment and Services

offering have shown tremendous growth and is on path tomuch higher numbers.

Risk and Concerns

Increase in opportunities in Telecom/IT segment has attractedglobal solution providers and increased number of domesticplayers which has resulted in increase competition and lowermargins. Additionally, cash flow remains a major constraintas ORG’s ability to secure and execute large project profitably.

Satellite Services :


Satellite services industry cover broadcast teleport services,SATCOM (Telecom conversions) and satellite teleportservices. Satellite services market to reach amount USD14.8billion by 2019 and more than 1200 satellites are expected tobe lunched in next 10 years. With proliferation of HD andDigital TV the Broadcasting services as an area is looking upEurope’s industry is well placed to exploit these opportunitieswith numerous world cast broadcasters.


Increasing public and private investment for satellite servicesin broadcasting services (TV, Mobile Earth, Fixed Earthsolution), Teleport Services ( Carrier SCPC etc.) andSATCOM (Telecom conversion).

Belgium Satellite Services SA (BSS) being among the topsatellite service provider worldwide will be able to exploit theopportunities.

Outlook

The Company has plan for expansion and strengthen thepenetration to increase the subscriber base within the Belgiumand PAN Europe. The company has robust business plan toconcentrate on customer satisfaction, explore businessopportunities in Africa, strengthen tie with Asian Channelsand market share maximization. BSS expects significantbusiness growth with sustain profit margins.

Risk and Concerns

The major concern for the company is completion onbandwidth pricing and advancement in Technologies. Hencethe Company is planning to concentrate on quality of servicesat competitive pricing.

Software Services


Software development and services has been and remainsthe key driving force in deploying IT services. It has gainedimpetus from the initiative taken by the Government for rollingout E-Governance solutions and Corporate initiative ofincreasing efficiency and productivity in business. The BFSIsegment is gaining impetus with more and more financialsolutions using IT domain to provide services to everexpanding customer base both in Urban and Rural India.Immense opportunities are opening up in Global markets byway of outsourced software development.


The Software services business of the company has beingcarried out through its wholly owned subsidiary “TechUnified”, Which is a new venture for the company and started


its operation in the third quarter of the fiscal year ended March,2008. The company is making its strategy to grab theopportunities available within the Middle East and domesticmarkets focusing in BFSI segment.

Outlook

The Company has plans for diversifying and building BPObusiness and providing managed services for softwaresolutions. We envisage seeing some significant revenuegrowth and increasing in profit margin through this segmentof business, as it compliments the Services business of ORGin Telecom/IT domain. The jobs which were outsourced earliercan now be undertaken in house thereby providing one stopsolution.

Risk and Concerns

According to Industry reports new players are emerging inthis segment both domestic and Global. There is increasedpitch of developed countries not to outsource to ensure inhouse jobs is basically the risk and concern for the Companiesbusiness under the segment.

Annexure-IICORPORATE GOVERNANCE REPORT FOR THE YEAR2010-11

I. Corporate Governance Philosophy:

The primary objective of good Corporate Governance isto create and adhere to a corporate culture of conscienceand consciousness, transparency and openness and todevelop capabilities and identify opportunities that bestserves the goal of value creation. Corporate governanceis about maximizing shareholder value legally, ethicallyand on a sustainable basis, while ensuring fairness toevery stakeholder - our customers, employees, investors,vendor-partners, the governments of the countries inwhich we operate, and the community. Thus, corporategovernance is a reflection of our culture, policies, ourrelationship with stakeholders and our commitment tovalues.

Our Board exercises its fiduciary responsibilities in thewidest sense of the term. Our disclosures always seekto attain the best practices in international corporategovernance. We also endeavor to enhance long-termshareholder value and respect minority rights in all ourbusiness decisions.

Our corporate governance philosophy is based on thefollowing principles:

� To satisfy the spirit of the law and not just the letter ofthe law;

� Corporate governance standards should go beyondthe law ;

� Be transparent and maintain a high degree ofdisclosure levels;

� When in doubt, disclose;

� Make a clear distinction between personalconveniences and corporate resources ;

� Communicate externally, in a truthful manner, abouthow the Company is run internally;

� Comply with the laws in all the countries in which theCompany operates ;

� have a simple and transparent corporate structuredriven solely by business needs ;

� Management is the trustee of the shareholders’ capitaland not the owner .

Your company remains committed to achieving theseobjects. Given below is the report on corporategovernance at ORG Informatics Limited.

II Board of Directors :

As on 31.3.2011, the Board of Directors of the Companycomprises of Five Directors of whom two are Executivesand three are Non-Executive Directors. The Company isprofessionally managed and its Board, which overseeshow the management serves and protects the long-terminterests of all our stakeholders. We believe that an active,well-informed and independent Board is necessary toensure the highest standards of corporate governance.Our Board of Directors comprises of professionallyqualified Directors who have rich experience in the fieldof Management, Information Technology,Telecommunications and Finance.

(a) Composition of Board* :

The names, Categories of the Directors on the Board,number of Directorships and Committee Position held bythem in other companies, attendance of Directors at BoardMeetings during the year under review and the last AnnualGeneral Meeting are given below:

Name of Category Number of Whether Number of Number ofDirectors Board Meeting attended last Directorships in Committee

during the year AGM held on other Public positions held2010-11 30.09.2010 Companies in other Public

Companies**Held Attended Chairman Director Chairman Member

Mr. Sushil Kumar Executive 5 5 YES — — — —Chaturvedi DirectoerMr. B.V. Executive- 5 5 YES — 5 — 1Suryakumar*** DirectoerMr. Kartikeya Non-Executive-V. Sarabhai Non-Independent 5 4 YES — 1 — 1Mr. R.L. Dube Independent 5 3 NO — 1 — —

DirectorMrs.Binu Independent 5 4 NO — 2 — —Mehta**** Director

* All changes in Directorship post 31st March, 2011have been reported in the Director’s Report only.

** In accordance with Clause 49 of theListing Agreement, memberships of only the AuditCommittee and Shareholders’ / Investors’ GrievanceCommittees of Public Limited Companies have beenconsidered.

*** Appointed as Managing Director of the Companywith effect from 19.8.2010 for a period of One (1)year. Before this he was non-executive director ofthe Company. He has been re-appointed asManaging Director for another term of two (2) yearsin the meeting of the shareholders of the Companyheld on 30.09.2011.


**** Appointed as Director of the Company with effectfrom 19.8.2010.

No. and date of Board Meetings:-Five Board Meetings were held during the year 2010-2011 on the following dates.

28.5.2010, 19.08.2010, 04.09.2010, 07.12.2010, and03.03.2011.

(b) Code of Business Conduct and Ethics for Directorsand Senior Management.

The Board of Directors of the Company by CircularResolution dated 1.12.2005 passed by them, has adoptedthe Code of Business Conduct and Ethics for Directorsand Senior Management (‘the code ‘).

A copy of the Code has been put on the Website of theCompany i.e. www.orgltd.com

The Code has been circulated to all the members of theBoard and Senior Management and the Compliance ofthe same has been affirmed by them. A declaration signedby the CEO of the Company is given below :

(c ) DECLARATION.

I hereby confirm that, the Company has obtained from allthe members of the Board and Senior Management,affirmation that they have complied with the Code ofBusiness Conduct and Ethics for Directors and SeniorManagement in respect of the Financial Year 2010-2011.

For ORG Informatics Limited,

sd/-Sushil Kumar ChaturvediChief Executive OfficerAugust 16, 2011New Delhi,

(d) Certification by the Managing Director:Mr. B.V. Suryakumar, Managing Director of the Companyhas issued a Certificate to the Board on the lines of sub-clause V of Clause 49 of the Listing Agreement inconnection with the Financial Statements and Cash FlowStatement etc. for the year 2010-11.

The said Certificates was placed before the BoardMeeting held on 5th October, 2011 and were recordedthereat.

III. Audit Committee :1) The Audit Committee of the Company is constituted

in line with the provisions of the Clause 49 of theListing Agreement with Stock Exchange read withSection 292A of the Companies Act, 1956.

2) The term of reference of the Audit Committee arebroadly the same as suggested under the Listingagreement entered into between the company andStock Exchanges.

3) The Audit Committee invites such of executives, asit considers appropriate (particularly finance head),representatives of the Statutory Auditors to bepresent at its meeting. The Company Secretary actsas the Secretary to the Audit Committee.

4) During the financial year under review, five AuditCommittee meetings were held on the 28.5.2010,

18.8.2010, 4.9.2010, 7.12.2010 and 3.3.2011. Thecomposition of the Audit Committee and the detailsof meetings held and attended by its members aregiven hereunder :

Name of Designation No. of AttendedMember Meeting

Held

Mrs. Binu Mehta Chairman- 5 3Independent

Director

Mr. B.V. Suryakumar Member - 5 2ExecutiveDirector

Mr. Kartikeya Member-Non- 5 3V. Sarabhai Executive-

Non –Independent

Mr. R.L. Dube Member- 5 2Independent

DirectorBrig. J. S. Ahuja Member- 5 4

IndependentDirector

# Attendance and Quorum : During the financial yearended 31st March, 2011, five meetings of thecommittee were held and out of five meetings, fourwere attended by two members and one meetingwas attended by three members.

IV. Shareholders’ / Investors’ Grievance Committee:

During the financial year under review, the Shareholders’/ Investors’ Grievance Committee Meeting was held onlyone on 28.05.2010 and was comprises of followingDirectors :

Name of Member Designation No. of AttendedMeeting

Held

Mr. B.V. Suryakumar Chairman 1 1Brig. J. S. Ahuja Member 1 1Mr. Sushil KumarChaturvedi Member 1 1Mr. Kartikeya V. Sarabhai Member 1 1Mr. Manoj Gupta Member 1 1

It was reported in the meeting that 11 complaints werereceived by the Company from the Shareholders havebeen amicably resolved by the Company.

V. Remuneration Committee :

During the financial year under review, the RemunerationCommittee Meeting was held one time on 4.9.2010 andwas comprises of following Directors :

Name of Member Designation No. of AttendedMeeting

Held

Mr. KartikeyaV. Sarabhai Chairman 1 1Mr. R. L. Dube Member 1 1Mrs. Binu Mehta Member 1 1


The meetings of the Remuneration Committee was heldon 4.9.2010 where all the then members were present.Agreement between the Company and Managing Directorwas reviewed in this meeting.

Details of Remuneration and sitting fee paid toDirectors during the financial year 2010-11.

S . Name of Relat ionship Si t t ing Salaries & Commission Tota lNo. Directors with other Fees’ for Perquisites (Incl. 2010-11 2010-11

Directors Board & P.F. SuperCommittee Annuation &

Meet ing Grantuity2010-11 2010-11

Rs. Rs. Rs. Rs.1. Mr. Kartikeya

V. Sarabhai None 30,000 Ni l N i l 30,000

2. Mr. B. V.Suryakumar* None 11,000 1,854,839 Ni l 1,865,839

3. Mr. ManojGupta** None Ni l 1,352,248 Ni l 1,352,248

4. Mr. R.L.Dube None 23,000 Ni l N i l 23,000

5. Brig. J.S.Ahuja*** None 7,000 Ni l N i l 7 ,000

6. Mr. SushilKumarChaturvedi None Ni l 4,488,852 Ni l 4,488,852

7. Mr. KalyanMazumder****None Ni l N i l N i l N i l

8 Mrs. BinuMehta***** None 28,000 Ni l N i l 28,000

* Appointed as Managing Director of the Companywith effect from 19.8.2010.

** Resigned as Managing Director of the Company witheffect from 19.8.2010.

*** Resigned as Director of the Company with effectfrom 1.8.2010.

**** Resigned as Director of the Company with effectfrom 21.6.2010.

***** Appointed as Director of the Company with effectfrom 19.8.2010.

VI. ESOS Committee :

During the financial year under review, no ESOSCommittee Meeting was held and was comprises offollowing Directors :

Name of Member Designation No. of Meeting Held Attended

Mr. B.V. Suryakumar Chairman 0 0

Mr. Kartikeya

V. Sarabhai Member 0 0

Mr. Sushil KumarChaturvedi Member 0 0

i) Vesting and allotment under this trench nowcompleted.

ii) On 30.8.2005, the ESOS Committee of the Companyhas allotted 10000 Options to Mr. B.V. Suryakumar,the then Director of the Company. The said Optionsare to be vested into the equity shares of Rs.10/-each of the Company at a premium of Rs.40/- pershare, over a period of 4 years, at the rate of 25%per year commencing from 30.8.2006, on the basisof accepted Options.

iii) On 19.9.2006 ESOS Committee of the Company hasallotted 45,000 Options to Mr. Sushil KumarChaturvedi the then employee of the Company. Thesaid Options are to be vested in to the equity sharesof Rs.10/- each of the Company at a premium of Rs.52/- per share, over a period of 4 years, at the rate of25% per year commencing from 19.9.2007, on thebasis of accepted Options.

In the Annual General Meeting held on 29.9.2008,the Shareholders of the Company have approvedthe revised price of these shares as Rs.27/- pershare i.e. Rs.10/- plus Rs.17/- as premium.

VII. General Body Meetings:Location, date and time of Annual General Meetings /Extraordinary General Meetings held during last threeyears.

Year Date Time Location

2007-200832nd AGM 29.9.2008 11.00 A.M. Vanijya Bhavan, Race

Course,Vadodara2008-09 29.12.2009 11.00 A..M. Vanijya Bhavan,33rd AGM (The AGM was Race Course,Vadodara(with extension adjourned tosought from 26.2.2010 andCentral Government) further ad-

journed to sine-die. The sine-dieadjourned AGMwas heldon 30.9.2011 toadopt AuditedAccounts for theF.Y. 2008-09

2009-10 30.9.2010 11.00 A..M. Vanijya Bhavan, Race34th AGM (The AGM was Course,Vadodara

adjourned tosine-die. Thesine-die adjournedAGM was held on30.9.2011 toadopt AuditedAccounts forthe F.Y.2009-10

All the resolutions setout in the respective Notices (Except33rd AGM and 34th AGM) of the Meetings aforesaid werepassed by the shareholders of the Companyunanimously. With respect to the 33rd and 34th AnnualGeneral Meetings all the resolutions setout in the Noticewere passed by the shareholders except adoption ofAudited Accounts including report of Board of Directorsand Auditors thereon for the financial year 2008-09 and2009-10 respectively as the same were not ready. Thesaid item of adoption of Audited Accounts for the financialyears 2008-09 and 2009-10 were passed by theshareholders in the adjourned AGM, 2009 and AGM, 2010both held on 30th September, 2011.

During the year under review, there was no occasion forthe Company to put any resolution through postal ballotor any of the matters as mandated by Section 192A of theCompanies Act ,1956 / Clause 49 of the ListingAgreement.


This year also the Company has not put any resolutionthrough postal ballot.

VIII. Disclosures :i. There are no materially significant related party

transactions of the Company which have potentialconflict with the interest of the Company at large.

ii. Details of non-compliance by the Company, penalties,strictures imposed on the Company by the StockExchange(s) or SEBI or any other statutory authority,on any matter related to capital markets, during thelast three years 2007-08, 2008-09 and 2009-10respectively : Nil

iii. The Company has fulfilled the following non-mandatory requirement as prescribed in AnnexureID to Listing Agreements with Stock Exchange(s) :

a. The Company has set up a RemunerationCommittee, details of which have been givenearlier in this report.

iv. Secretarial Audit : A qualified practicing CompanySecretary carried out secretarial audit to reconcilethe total admitted equity shares capital with theNational Security Depository Limited (NSDL) andCentral Depository Services (India) Limited (CDSL)and the total issued and listed equity share capital.The secretarial audit report confirms that the totalissued/paid-up capital is in agreement with totalnumber of shares in physical form and the totalnumber of shares in dematerialized form held withNSDL and CDSL.

v. In terms of Section 299 (3)(b) of the Companies Act,1956, the General Notices of disclosure of interestare obtained from the Directors and accordingly theRegister of Contracts under Section 301 of theCompanies Act, 1956 is tabled and signed.

vi. Transactions with the “related parties” are disclosedin detail in note No.14 of ‘Notes to forming part ofAccounts’ annexed to the financial statements forthe year ended 31st March, 2011. Adequate carewas taken by the Board to ensure that the potentialconflict of interest did not harm the interest of theCompany.

vii. During the year under review, the Company hascomplied with the requirements of Stock Exchanges/ SEBI / Statutory Authorities on all matters related toCapital Markets and there was no non-complianceduring the last three years by the Company on anymatter related to Capital Markets, except following:

During the year under report, the Company couldnot timely comply with the provisions of Clause 35and 47C etc. of the Listing Agreement whereas theCompany could not comply with Clause 41 of thelisting agreement for the reasons, beyond the controlof the management of the Company.

IX. Means of Communication:a. During the year under report, the Company was not

able to submit/publish its any Audited FinancialResults/Un-audited Financial Results to the StockExchanges.

b. Management Discussion & Analysis Report is part

of Directors’ Report to Members and annex asAnnexure-I to the Director’s Report.

X. Shareholders Information:a) Annual General Meeting.

Date : 30.09.2011Time : 11.00 A.M.Venue : Vanijya Bhavan, Race Course,

Vadodara - 390 007.

AGM held on 30th September, 2011 was adjournedto 1st November, 2011 at same place for Adoption ofAccounts for the year ended on 31st March 2011.

b) Financial Calender : 2011 – 2012

Event Board Meeting

i) Unaudited Results Qtrly. June11 August 15-2011Unaudited Results Qtrly. Sept.11 Nov. 15-2011Unaudited Results Qtrly. Dec. 11 Feb. 15-2012Audited Accounts March, 2012 May -15-2012

(ii)Annual General Meeting : September 30th, 2012

d) Listed on Stock Exchange(s) and Stock Code :Bombay Stock Exchange Limited - 517195Floor 25, P.J. Tower, Dalal Street,Mumbai-400001

National Stock Exchange of India Limited - ORGINFOExchange Plaza, Bandra Kurla Complex,Bandra (E), Mumbai-400051.

(The trading of the shares of company was suspendedon NSE w.e.f Nov, 2009 and on BSE w.e.f. July 19th,2010. However after furnishing of all pending financialresults with the stcok exchanges the company willmake the necessary application with both StockExchanges, BSE and NSE for revocation ofsuspension).

e) Listing fees have been paid up to date to the BombayStock Exchange Limited and National StockExchange of India Limited.

f) Stock Price Data on BSE & NSE :

Rs.

MONTH HIGH HIGH LOW LOW(BSE) (NSE) (BSE) (NSE)

Apr - 2010 12.09 - 10.78 -May – 2010 12.00 - 10.30 -June - 2010 11.10 - 8.02 -July -2010 9.60 - 8.16 -

g) Registrar & Transfer Agents:

MAS Services Ltd. has been acting as Registrar andShare Transfer Agent for both Physical as well asDematerialization of shares of the Company. Themembers may contact them on the following address:Communication Address : M/s MAS Services Limited

T-34, 2nd Floor,Okhla Industrial Area,Phase-II,New Delhi 110 020.

E-mail Address : [email protected] No. : 011-2638-7281/82FAX No : 011- 26387384


COMPLIANCE CERTIFICATE ON CORPORATEGOVERNANCE.

To the Members of

ORG Informatics Limited,

Vadodara

We have examined the registers, records, books & papersnecessary for issuing this certificate for the compliance ofconditions of corporate governance by ORG InformaticsLimited, for the year ended 31st March, 2011, as stipulatedin clause 49 of the Listing Agreements with Stock Exchanges.

The compliance of conditions of corporate governance is theresponsibility of the management. Our examination was limitedto procedures and implementation thereof, adopted by theCompany for ensuring the compliance of the conditions of theCorporate Governance. It is neither an audit nor an expressionof opinion on the financial statements of the Company.

In our opinion and to the best of our information and accordingto the explanations given to us, we certify that the Companyhas complied with the conditions of Corporate Governanceexcept non compliance of clause 41 by non submitting/ Publishing Un-audited/Audited Financial Results forthe year ended 31.3.2009 and quarter ended 30.6.2009,30.9.2009, 31.12.2009 and year ended 31.3.2010 and alsofor the quarter ended 30.6.2010, 30.9.2010, 31.12.2010 andyear ended 31.3.2011 and also non forwarding certificateof Statutory Auditors on Limited Review on the financialresults in respect of the said quarters, as stipulated in theabove mentioned Listing Agreement entered in to with theStock Exchanges. The Company has also not filed its BalanceSheets for the year ended 31.3.2009 and 31.3.2010 with theRegistrar of Companies, Gujarat.

We state that no investor grievances are pending for a periodexceeding one month against the Company as per the recordsmaintained by the Shareholders’/ Investors’ GrievanceCommittee.

We further state that such compliance is neither an assuranceas to the future viability of the Company nor the efficiency oreffectiveness with which the management has conducted theaffairs of the Company;

Signed at Vadodara on this 3rd Day of September, 2011

For Jayesh Vyas & Associates,Practicing Company Secretaries

Jayesh VyasProprietorF C S 5072 & C. P. No. 1790

h) Share Transfer System:

The shares of the Company are compulsorily tradedin dematerialization form as per SEBI’s directive. TheCompany has already appointed MAS ServicesLimited., New Delhi as its Registrar & Share TransferAgent for dematerialization purposes and also hasset up the requisite facilities for dematerialization ofshares with National Securities Depositories Ltd.,(NSDL) and Central Depository Services (India) Ltd.,(CDSL).

For physical Share Transfer, if the share transferdocuments are otherwise in order, share transfersare registered upon approval by the Share TransferCommittee, the meetings of which Committee aregenerally held at regular intervals of about 15 / 20days. Thereafter, duly transferred share certificatesare dispatched.

The total number of shares transferred during theyear 2010 - 2011 was 2823.

i) Distribution of category wise Shareholding ason 31.3.2011.

Category No. of PercentageShares (%)

Promoters 5668892 33.02Institutional Investors 560 0.00Body Corporate 1966231 11.45Indian Public 6889381 40.12NRI/ Foreign Nationals 30366 0.18OCBs/FII 2437017 14.20Trust 186 0.00Clearing Members 106641 0.62Foreign Bank 71200 0.41( As Custodian)TOTAL 17170474 100.00

ii) Distribution of Shareholding as on 31.3.2011.

Shareholding of Nominal No. ofValue of Rs. shares

1 to 5000 25938085001 to 10000 77872910001 to 20000 70395720001 to 30000 41123130001 to 40000 29128340001 to 50000 25724750001 to 100000 682233Over 100000 11451986TOTAL 17170474

j) Dematerialization of Shares:During the year under review, 260918 shares havebeen dematerialized through NSDL/ CDSL.

ISIN No. INE686D01012

k) Address for Correspondence:Shareholders can correspond with Company’sRegistrar and Share Transfer Agent (RTA) viz. MASServices Limited, T-34, 2nd Floor, Okhla IndustrialArea, Phase-II, New Delhi – 110 020, Tel. No.011 –


26387281/82, Fax No. 011-26387384 e-mail :[email protected] or at the Company’s RegisteredOffice situated at 3rd Floor, “Abhishek”, AksharChowk, Old Padra Road, Vadodara-390 020, Tel.No. 0265-2320091, 2320093, Fax No. 0265-2320379.

Mr. Vinod Singh Negi, Company Secretary isdesignated as Compliance Officer may be contactedat : Tetephone No.011-45013327, email:[email protected].

Auditors’ ReportTo the Members of ORG Informatics Limited1. We have audited the attached Balance Sheet of ORG

Informatics Limited (“the Company”) as at March 31,2011, the Profit and Loss Account and also the CashFlow Statement for the year ended on that date annexedthereto. These financial statements are the responsibilityof the Company’s management. Our responsibility is toexpress an opinion on these financial statements basedon our audit.

2. We conducted our audit in accordance with auditingstandards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material misstatement. An auditincludes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements.An audit also includes assessing the accounting principlesused and significant estimates made by management,as well as evaluating the overall financial statementpresentation. We believe that our audit provides areasonable basis for our opinion.

3. As required by the Companies (Auditors’ Report) Order,2003 (as amended) issued by the Central Government ofIndia in terms of sub-section (4A) of section 227 of theCompanies Act, 1956, we enclose in the Annexure, astatement on the matters specified in paragraphs 4 and 5of the said Order.

4. The financial statements have been prepared on goingconcern basis, despite significant losses suffered duringthe year, substantial contingent liabilities not provided for(Refer Note Nos. 1(a), (b), (c), (d)), legal cases filed bysome of the suppliers against the Company and its officialsunder section 138 of the Negotiable Instruments Act, 1881(Refer Note No. 2(a)), restriction imposed on a majorcustomer by court, on vendor’s request, from makingany payment to the Company (Refer Note No 2(c)),causing severe cash crunch, which had in turn resultedin defaults in payment of statutory liabilities / noncompliance of statutory requirements/ loss of keymanagement personnel / staff and considerable scalingdown of operations. The Company’s ability to continue asa going concern is dependent upon satisfactory resolutionof the above matters besides steps being taken bymanagement to provide / arrange for significant additionalfunds.

5. Attention is invited to the following:i. We are unable to opine on the adequacy of provision

of TRs 161,700 for permanent fall in the value ofinvestments amounting to TRs 695,202 in absenceof convincing evidence;

ii. We are unable to opine on the realisability of nonmoving stock of Stores and Spares of TRs 50,286not provided by the management for reasons statedin Note No. 7.

iii. We are unable to opine on recoverability / realisabilityof old outstanding of Sundry Debtors aggregating toTRs 2,337,024 (including TRs 4,968 due fromSubsidiary) which may not be recoverable and whichare not appropriately evidenced with

correspondence statement of accounts, unconfirmed,unreconciled and against which no materialrecoveries have been made till date of completion ofaudit. No provision has been made for suchreceivables as the management considers them asgood for recovery.

iv. We are unable to opine on the bank balance for whichBank Balance confirmations are not available to thetune of TRs 9,565.

v. We are unable to opine on recoverability / realisabilityof old outstanding in respect of (a) advances of TRs.20,319 given to other company (b) TRs 28,080advance given to Vendors and (c) TRs 6,593receivable in respect of Tender Deposit given whichare not appropriately evidenced withcorrespondence statement of accounts, unconfirmed,unreconciled and against which no materialrecoveries have been made till date of completion ofaudit. No provision has been made for suchreceivables as the management considers them asgood for recovery.

vi. In the absence of detailed workings, convincingevidence and legal consultants’ opinion on theavailability of TRs 28,455 in respect of CENVAT creditfor set off in the future, we are unable to comment onthe appropriateness of carry forward of the CENVATrecoverable.

vii. In respect of guarantee of TRs 25,000 invoked byMPSEDC during the year, the management hasclaimed that the amount is good of recovery sincethe matter was sub judice and now the company isbeing Judgment creditor, the management’s claimremains to be substantiated by the Order passed bythe Court of appropriate jurisdiction. The Companyhas made the claim of said amount with the MPSEDCfor wrongful invocation of the guarantee. We areunable to opine on the recoverability or otherwise ofthe amount shown under Loans and Advances.

viii. We are unable to opine on collectability of dues inrespect of revenue booked in respect of MTNLcontract from BEL to the tune of TRs. 132,069 whichare dependent on achievement of certain milestones.

ix. In respect of Managerial Remuneration paid duringthe year to Managing and Whole time Director ofTRs. 7,696, (Previous year TRs. 6,015),Shareholders’ approval was taken in Annual GeneralMeeting held on 29-12-2009 and 30.9.2010. However,No approval from Central Government is obtainedfor reason stated in Note No 20.

x. No Provision has been made for :a. Impairment loss of Fixed Assets for reasons

stated in Note No. 10.b. Loans and advances of TRs. 625,403 due from

Subsidiary Companies and Associate Companyfor the reasons stated in Note No. 9 (b).

c. Invocation of bank guarantees given in respectof various projects undertaken by the Companyto the extent of TRs 251,708 and consequentialpenalties subsequent to the close of the year.

d. Interest and commission of TRs 64,145, payable,


in terms of agreements, to the vendors (shownas contingent liability).

e. Bank and Other Charges of TRs 19,470 paid toone of the vendor (shown as contingent liability).

f. Implementation, service / warranty chargesaggregating to TRs 30,582 (shown as contingentliability).

g. Liquidated Damages / penalty payable tocustomers for delays in performance / noncompliance of some of the contractual Termsand conditions aggregating to TRs 448,736(shown as contingent liability).

h. Interest and Penal charges on bank loansaggregating to TRs. 102,840 for the reasonsstated in Note No. 6 (shown as Contingentliability)

i. Penalty and other charges which may beimposed by (a) the various Statuary/RegulatoryAuthorities on account of non compliance of theprovisions of the various statutes including nonpayment of statutory dues and filing of periodicreturns. (b) the Court, with respect to the casesfiled by the parties against Company’s officials(including some past officials) under sections138 and 143 of the Negotiable Instruments Act,1881, on account of dishonor of post datedcheques issued to them.Due to uncertainty involved, the impact of theabove on the profit for the year is presentlyunascertainable.

6. Further to our comments in the Annexure referred to inparagraph 3 and subject to our comments in paragraphs4 and 5 above, we report that:(i) We have obtained all the information and

explanations, which to the best of our knowledgeand belief were necessary for the purposes of ouraudit;

(ii) In our opinion, proper books of account, as requiredby law have been kept by the Company so far asappears from our examination of those books;

(iii) The balance sheet, profit and loss account and cashflow statement dealt with by this report are inagreement with the books of account;

(iv) In our opinion, the balance sheet, profit and lossaccount and cash flow statement dealt with by thisreport comply with the accounting standards referredto in sub-section (3C) of Section 211 of the CompaniesAct, 1956, except to the extent referred to hereunder:a. The Company has not determined the provision

required for slow moving / non moving inventoryfor the purpose of arriving at the Value to bescaled down in terms of Accounting Standard 2– Inventories;

b. The Company has not appropriately determinedand provided for fall in value of long terminvestments in subsidiary / associate companies,in terms of Accounting Standard – 13 –Investments; and

c. The Company has not adequately determinedimpairment in assets during the year, in terms ofAccounting Standard - 28 – Impairment of Assets.

(v) On the basis of written representations received fromdirectors as on March 31, 2011 and taken on recordby the Board of Directors, we report that none of thedirectors is disqualified as on March 31, 2011 frombeing appointed as a director in terms of clause (g)of sub-section (1) of Section 274 of the CompaniesAct, 1956;

(vi) In our opinion and to the best of our information andaccording to the explanations given to us, the saidaccounts read together with accounting policies andnotes thereon give the information required by theCompanies Act, 1956, in the manner so required;

7. Subject to our remarks mentioned in paras 4 and 5 above,the impact on the financial results for the year isunascertainable and our comments contained in annexurereferred to in Paragraph 3 above, in our opinion and to thebest of our information and according to the explanationsgiven to us, the said accounts read together with thenotes thereon give the information required by theCompanies Act, 1956, in the manner so required and givea true and fair view in conformity with the accountingprinciples generally accepted in India;(a) in the case of the balance sheet, of the state of affairs

of the Company as at March 31, 2011;(b) in the case of the profit and loss account, of the profit

for the year ended on that date; and(c) in the case of the cash flow statement, of the cash

flows for the year ended on that date.

For Sorab S. Engineer & Co.Firm Registration No. 110417WChartered Accountants

CA. Chokshi Shreyas B.PartnerMembership No. 100892VadodaraOctober 5, 2011

ANNEXURE TO AUDITORS’ REPORT(Referred to in paragraph 3 of our report of even date)

Re: ORG Informatics Limited1. In respect of its fixed assets:

a) The Company has generally maintained properrecords showing full particulars, including quantitativedetails and situation of fixed assets.

b) Fixed assets held by the Company was not subjectedto physical verification. In the absence of verificationand reconciliation we are unable to state whetherthere are any discrepancies.

c) Though the Company has disposed off considerableportion of its fixed assets, from areas wherein it hadstopped operation due to closure of office, as costsaving measure during the year, its ability to continueas a going concern, we are informed by themanagement, is not affected by such disposals.

2. In respect of its inventories:

a) As explained to us, during the year none of theinventories comprising of Projects in progress, storesand spares, trade goods etc. have been subjectedto physical verification at any time during the year by


the management.b) In the absence of physical verification indicated herein

above, there is no question of adequacy or otherwiseof the procedures.

c) In our opinion and according to the information andexplanations given to us, the Company is maintainingproper records of its inventories. However duringthe year since the inventories owned by theCompany had not been physically verified by themanagement, we are unable to state whether or notthere are any discrepancies.

3. In respect of loans, secured or unsecured, granted bythe Company to companies, firms or other parties coveredin the register maintained under section 301 of theCompanies Act, 1956, according to the information andexplanations given to us:

a) The Company had granted interest bearing loan to asubsidiary by converting the share application moneyinto loan vide agreement dated 30th Oct. 2008 andinterest free loans to other subsidiaries besidesamounts advanced to one company covered in theregister maintained under Section 301 of theCompanies Act, 1956. As at the year-end, theoutstanding balance of such loan granted to thiscompany is TRs. 11,295 and the maximum amountinvolved during the year was TRs. 12,436.

b) In our opinion and according to the information andexplanations given to us, the terms and conditions ofthe interest free loans referred to above, keeping inview significant interest claimed by suppliers forcredits provided, bankers and other parties, appearprima facie prejudicial to the interest of the Company.

c) The loans granted are repayable on demand. Asinformed, the Company has not demandedrepayment of the loans during the year and thusthere is no default on the part of the parties to whomthe amount is lent.

d) The Company has, in the earlier years, taken interestbearing (and interest free) loan from a Party coveredin the register maintained under Section 301 of theCompanies Act,1956 and the outstanding balance ofsuch loan aggregated to TRs 33,567 (includingaccrued interest) and the maximum amount involvedduring the year was TRs 33,656.

e) The rate of interest and other terms and conditionsof such loan is, in our opinion, prima facie notprejudicial to the interest of the Company.

f) The loan is repayable on demand and the same hasnot been demanded.

4. In our opinion and according to the information andexplanations given to us and our evaluation of theprevailing internal control structure and its operationdisclosed weakness in internal control systems. The saidcontrol structure in operation can not be stated to becommensurate with the size of the Company and thenature of its business with regard to the purchase oftraded goods / inventory, fixed assets and with regard tothe sale of goods and rendering of services.

5. In respect of contracts or arrangements entered in theregister maintained in pursuance of section 301 of the

Companies Act 1956, to the best of our knowledge andbelief and according to the information and explanationsgiven to us:

a) The particulars of contracts or arrangements referredto Section 301 have been entered in the registerrequired to be maintained under the said section.

b) According to the information and explanations givento us, where each of such transactions, other thaninterest bearing and interest free loans granted(Referred to in Para 3(b), (c) and (d) above), is inexcess of Rs. 5 Lakhs in respect of any party, thetransactions have been made at prices which areprima facie, reasonable having regard to the prevailingmarket prices at the relevant time, except that inrespect of sale of services, no comparison of pricescould be made since similar services are not beingrendered to any other party by the Company.

6. In our opinion and according to the information andexplanations given to us, the Company has not acceptedany deposits from public within the meaning of Section58A and 58AA or any other relevant provisions of theCompanies Act, 1956 and the Companies (Acceptanceof Deposits) Rules, 1975 with regard to the depositsaccepted from the public.

7. There is no Internal Audit System in the Company duringthe year under review and hence we are unable tocomment on this aspect.

8. As informed to us, the Central Government has notprescribed maintenance of cost records under clause(d) of sub-section (1) of Section 209 of the CompaniesAct, 1956.

9. According to the information and explanations given to usand as revealed by the books of accounts maintained bythe Company, except for the following statutory dues, theCompany has been generally regular in depositingundisputed statutory dues, including Provident Fund,Employees State Insurance, Income tax, Sales Tax,Service Tax and other statutory dues with the appropriateauthorities during the year:

Particulars Balance at Period31.3.11 from

Amount (TRs.) which due

Contribution to PF 2,403 July ‘10Staff Professional Tax 209 Oct ‘10Contribution to ESI 145 July ‘10Maharashtra CST 254 Aug ‘10Delhi CST 107 Oct ‘10Karnataka VAT 45 Mar ‘10UP Sales Tax 19 Dec’ 08Service Tax 16,650 Apr’ 08Education Cess Payable 902 Apr’08Secondary Higher Education Cess 409 Apr’ 08

During the year, the management has confirmed that therewere no dues payable in respect of Investor Educationand Protection Fund, Wealth Tax, Custom Duty, ExciseDuty, Cess and other material statutory dues.

In the case of Cess, the central government has till date


not prescribed the amount of Cess payable under section441A of the Companies Act, 1956.

The details of disputed demands which have not beendeposited during the year as under:

Nature of Nature of Amount Period to Forum whereStatue the dues (TRs.) which the dispute is

amount pendingrelates

Income Tax Penalty 9,555 2002-03 ITATAct, 1961 9,866 2003-04 CIT(Appeal)

1,874 2004-05 CIT(Appeal)

Income Tax 1,0942 2004-05 CIT(Appeal)21,083 2005-06 CIT(Appeal)15,396 2006-07 CIT(Appeal)15,996 2007-08 CIT(Appeal)

Sales Sales Tax 37,057 2008-09 AppellateTax Act Tribunal

Note: In respect of Income Tax demands, the Companyhas deposited TRs 20,000 on ad-hoc basis.

10. In our opinion and according to information andexplanations given to us, the accumulated losses of theCompany at the end of the financial year are more thanfifty percent of its net worth and the Company has notincurred cash losses in current financial year but theCompany had incurred cash losses in the immediatelypreceding financial year.

11. In our opinion and according to the information andexplanations given to us, the Company has defaulted inrepayment of dues to the banks. The period and theamount of defaults excluding interest and penal chargesare as under:

Description Period of Amount TRs.of Loan default involved

BOI – Cash Credit Account is NPA 29,222Since March 2008

BOI – BG Invoked October 2008 7,800PNB – Cash Credit Account is NPA 113,372

Since June 2010PNB – BG Invoked Account is NPA 58,000

Since June 2010CB – Cash Credit Account is NPA 91,386

Since Feb 2010CB – WCTL Account is NPA 8,549

Since Feb 2010CB – BG Invoked Account is NPA 5,243

Since Feb 2010SCB – Cash Credit Account is NPA 81,862

Since March 2010Barclay – WCL January 2009 95,863BOB – CC / WCTL/ Account is NPA 141,053BG Invoked Since Feb 2010

12. According to the information and explanations given to usand based on the documents and records producedbefore us, the Company has not granted loans andadvances on the basis of security by way of pledge ofshares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhimutual benefit fund / society.

14. According to the information and explanations given tous, the Company is not dealing in shares, securities andother investments.

15. In our opinion and according to the information andexplanations given to us, the Company has, other thanguarantees given to a bank on behalf of subsidiaryCompany, not given any guarantees for loans taken byothers from banks and financial institutions. The termsand conditions whereof are not prejudicial to the interestof the Company except for the guarantees which areinvoked by the banks.

16. To the best of our knowledge and belief and according tothe information and explanations given to us, no termloans, except vehicle loans which are repayable ininstallments, and their application is as agreed wereavailed by the Company during the financial year, hencethere is no question of any misapplication.

17. According to the information and explanations given tous, funds raised by the Company on short term basishave, prima facie, not been used during the year for longterm investment.

18. According to the information and explanation given to usand as evidenced by the books and records, theCompany has not issued any bonds / debentures duringthe year and hence there is no question of creating anysecurity during the year.

19. The Company has not, according to the information andexplanation given to us, raised any funds from publicduring the year hence the question of verification of enduse does not arise.

20. According to the information and explanations given tous, the Company has not made during the year, anypreferential allotment of shares to parties and companiescovered in the Register maintained under Section 301 ofthe Companies Act, 1956.

21. During the course of our examination of the books andrecords of the Company, carried out in accordance withthe generally accepted auditing practices in India, andaccording to the information and explanations given tous, we have neither come across any instance of fraudon or by the Company, noticed or reported during theyear, nor have we been informed of such case by themanagement.

For Sorab S. Engineer & Co.Firm Registration No. 110417WChartered Accountants

CA. Chokshi Shreyas B.PartnerMembership No. 100892VadodaraOctober 5, 2011


Balance Sheet as at March 31, 2011As at As at

March 31, 2011 March 31, 2010Schedule Amount Amount

No. (Rs. In ‘000) (Rs. In ‘000)

Sources of FundsShareholders Funds

Share Capital 1 171,705 171,705Reserves & Surplus 2 573,462 609,161

745,167 780,866Loan Funds

Secured Loans 3 566,673 506,658Unsecured Loans 4 1,463,812 1,521,687

2,030,485 2,028,345

Total 2,775,652 2,809,211Application of FundsFixed Assets 5

Gross Block 168,895 169,407Less: Depreciation / Amortisation 141,773 116,288

Net Block 27,122 53,119Investments 6 533,528 533,528Deferred Tax Asset 15,470 11,194(Refer Note B - 11 of Schedule 22)Current Assets, Loans and Advances

Inventories 7 76,692 158,231Sundry Debtors 8 2,367,553 2,622,672Cash and Bank Balances 9 56,124 56,553Other Current Assets 10 164,756 27,793Loans and Advances 11 752,804 717,376

3,417,929 3,582,625Less: Current Liabilities and Provisions 12

Current Liabilities 1,548,125 1,738,692Provisions 134,787 102,881

1,682,912 1,841,573Net Current Assets 1,735,017 1,741,052Profit and Loss account 13 464,515 470,318

Total 2,775,652 2,809,211Significant Accounting Policies andNotes to the Financial Statements 22

As per our report of even date attachedFor Sorab S. Engineer & Co. For and on behalf of the Board

Firm Registration No. 110417W B.V. Suryakumar Binu MehtaChartered Accountants Managing Director Director

CA Chokshi Shreyas B. Vinod NegiPartner Company Secretary

Place : Vadodara Place :VadodaraDate : October 5th, 2011 Date : October 5th, 2011


Profit and Loss Account for the year ended March 31, 2011Year ended Year ended

March 31, 2011 March 31, 2010Schedule Amount Amount

No. (Rs. In ‘000) (Rs. In ‘000)

Sources of Funds

INCOME

Revenue from operations 14 351,371 248,387

Other Income 15 63,745 128,962

Total (A) 415,116 377,349

EXPENDITURE

Consumption of Material / Cost of Goods sold 16 170,162 153,745

Stores and Spares Consumed 17 489 4,402

Project Service Expenses 18 122,749 -

Personnel Costs 19 39,174 36,486

Administrative and Other expenses 20 14,427 31,717

Interest and Finance Charges 21 31,426 147,700

Depreciation/Amortisation 5 25,923 30,066

Total (B) 404,350 404,116

Profit/(Loss) before Tax (A-B) 10,766 (26,767)

Less: Provision for taxation

Current Tax 14,408 -

Deferred Tax (Net) (4,276) 40,250

Net Profit/(Loss) after Tax 634 (67,017)

Less : Trasferred to Bond Redemption Reserve 634 -

Balance as per last Balance Sheet (470,318) (403,301)

Balance carried to the Balance Sheet 13 (470,318) (470,318)

Earning per share (Refer Note B - 12 of Schedule 22)

- Basic 0.04 (3.90)

- Diluted 0.04 (3.90)

Significant Accounting Policies and

Notes to the Financial Statements 22

As per our report of even date attachedFor Sorab S. Engineer & Co. For and on behalf of the Board

Firm Registration No. 110417W B.V. Suryakumar Binu MehtaChartered Accountants Managing Director Director

CA Chokshi Shreyas B. Vinod NegiPartner Company Secretary

Place : Vadodara Place :VadodaraDate : October 5th, 2011 Date : October 5th, 2011


1 Share CapitalAuthorised:

27,000,000 (Previous year 27,000,000)

Equity Shares of Rs.10/-each 270,000 270,000

Issued, subscribed and paid up:

17,170,474 (Previous year 17,170,474)

Equity Shares of Rs.10/- each fully paid up 171,705 171,705

(Refer Note B - 3 of Sechedule 22)

Of the above:

9,492,554 (Previous Year 9,492,554

Equity Shares of Face Value of Rs.10/- each) are issued and

alloted pursuant to contracts for consideration other than cash. 171,705 171,705

2 Reserves and Surplus

Capital Reserve:

Balance as per last Balance Sheet 3,780 3,780

Bond Redemption Reserve:

Balance as per last Balance Sheet 31,976 31,976

Add: Transferred from Profit & Loss Account 634 32,610 - 31,976

(Refer Note B - 4 (d) of schedule 22)

Securities Premium Account:

Balance as per Last Balance Sheet 564,788 602,199

Less: Premium on Redemption of FCCB 31,539 533,249 37,411 564,788

Employee Stock Options Outstanding:


Less: Transferred to General Reserve 5,803 -

Less: Reversal due to lapse of options - 9,834

(A) 3,823 9,626

Deferred Employee Compensation Expense:


Less: Reversals due to lapse of options - 5,101

Less: Transferred to profit & loss Account 1,009 2,018

(B) - 1,009

(A)-(B) 3,823 8,617

General Reserve:

Transferred from Employee Stock Option Outstanding 5,803 -

Less: Adjusted against Profit & loss Account 5,803 - -

573,462 609,161


Schedules forming part of Balance Sheet as at March 31, 2011

As at As atMarch 31, 2011 March 31, 2010

Amount Amount(Rs. In ‘000) (Rs. In ‘000)

3 Secured Loans

From Banks:

(Refer Note B - 6(a) of Schedule 22)

Cash Credit / Working capital Demand loans: 536,486 475,894

Interest Accrued and Due on above 30,096 30,096(Secured against pledge of Fixed Deposits,hypothecation

of stock of Raw Materials, Work in Progress, Stores and

Spares, Finished Goods and all other current assets of the

Company besides collateral security of movable Fixed assets.)

Vehicle Loans:From Banks: 91 668

(Secured against hypothecation of related vehicles)

566,673 506,658

4 Unsecured LoansShort Term Loans & Advances

From Banks (Refer Note B - 6(a) of Schedule 22) 75,000 75,000Interest Due 20,863 95,863 20,863 95,863

Other Loans & Advances

From Shareholders 28,303 28,614Interest accrued and due 5,264 33,567 3,988 32,602

From Others 619,982 670,982160, 2.5% Foreign Currency Convertible Bonds of face value 714,400 722,240

US $ 100,000 each (Refer Note B - 4 in shedule 22)

1,463,812 1,521,687

6 Investments - Non Trade, Unquoted (At Cost)(A) Long Term Investment:

In Subsidiary Companies:

ORG Telecom Ltd.

737,500 (Previous year 737,500) Equity Shares of Rs 10/- each fully paid up 28,000 28,000

Unified Technologies Private Limited

11,314 (Previous year 11,314) Equity Shares of Rs 10/- each fully paid up 323,400 323,400

ORG Singapore Pte. Ltd

320,000 (Previous year 320,000) Equity Shares at Par Value 29,110 29,110

Belgium Satellite Services S.A.

4,911,500 (Previous year 4,911,500) Equity Shares of Euro 1 each 329,147 329,147

fully paid up (Refer Note B - 5 of Schedule 22)





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In Other companies:

Alberio Singapore Pte. Limited

562,500 (Previous Year 562,500) Ordinary Shares of

singapore $ 0.01 each fully paid up 14,655 14,655

Smart Broadband Services Private Limited

2,600 (Previous Year 2,600) Ordinary Shares of Rs.10/- each fully paid up 26 26

724,338 724,338Less:Provision for Dimunition in value of Investments* 190,810 190,810

533,528 533,528* Details of Provision for Dimunition in value of Investments:

Unified Technologies Private Limited 161,700 161,700ORG Singapore Pte.Ltd. 29,110 29,110

190,810 190,810

7 Inventories

(As taken, valued and certified by the Management)

Stores and spares (Refer Note B - 7 of Schedule 22) 50,286 50,286

Project / Contracts in progress 26,406 107,945

76,692 158,231

8 Sundry Debtors

(Refer Note B - 8 of Schedule 22)

(Unsecured, considered good unless otherwise stated)

Debts outstanding for a period exceeding six months

-Considered Good 2,360,494 2,475,249

-Considered Doubtful 8,713 8,713

2,369,207 2,483,962

Less: Provision for Doubtful 8,713 8,713

2,360,494 2,475,249

Other Debts 7,059 147,423

2,367,553 2,622,672

9 Cash and Bank Balances

Cash and cheques in hand [including Foreign currency

notes equivalent to TRs 3 (Previous year TRs 3)] 20 35

Balances with scheduled banks ( Refer Note B - 6(b) of Schedule 22)

- in Current Accounts 2,862 4,030

- in Foreign Currency Accounts 9,439 9,490

- in Fixed Deposits Accounts

-Pledged with Court and Government Authorities 2,148 2,018

- in Margin Money Deposit Accounts

(Deposits under Bank lien for issue of Bank Gurantee) 41,655 40,980

56,124 56,553





10 Other Current AssetsInterest Accrued 4,388 2,194Other Receivables 28,299 25,599Income Receivable (Refer Note B - 8 (a) of Schedule 22) 132,069 -

164,756 27,79311 Loans and Advances

(Unsecured, considered good unless otherwise stated)Advances to Suppliers 28,080 25,159Advance recoverable in cash or kind or for value to be received

-Considered Good (Refer Note B - 9 (a) of Schedule 22) 63,785 64,369-Considered doubtful - -

63,785 64,369Less: Provision for doubtful advances - -

63,785 64,369Loan to wholly Owned subsidiary(Refer Note B - 9 (b) of Schedule 22)

- ORG Telecom Limited 139,868 136,517- ORG Singapore Pte. Ltd. 4,930 4,985- Unified Technologies Pvt.Ltd. 64,418 64,409- Belgium Satellite Serrvices S.A.-Belgium (Refer Note B - 5 of Schedule 22) 404,892 360,122

Advances to other group companies- Six Dee Telecom Solutions Limited 11,295 12,436 Advance Taxes Paid (Net of Provision for Taxation TRs.44,568, Previous year TRs. 30,130) 35,536 49,379

752,804 717,37612 Current Liabilities and Provisions

Current LiabilitiesSundry Creditors (Refer Note B - 17 of Schedule 22) 961,721 1,289,660Advances from customers 229,540 229,308Other Current Liabilities 356,864 219,724

1,548,125 1,738,692ProvisionsProvision for Gratuity 8,627 8,755Provision for Leave Encashment 1,782 1,287Provision for Premium on Redemption of FCCB 124,378 92,839(Refer No